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John Ulzheimer, Smartcredit.com consumer education president, on the U.S. credit-scoring system and a new study that found many consumers have near-pe...
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Here's some good news a new survey finds more and more consumers have near perfect credit scores.
Here to break -- down John Alzheimer is the president consumer education respond -- back.
-- well after the show look -- if these numbers really blow me away 18% of consumers how hot transport and by that I -- 800 to 850.
This is the highest since October of 2008.
-- analyze that's.
This is great news and it helps a kind of dispel the math.
That's all doom and gloom out there in the world credit reports and credit score and 800 plots.
It is really even eat under anyone's definition even and all the credit crunch people what 800 credit scores had absolutely no trouble at all getting access to Capital One -- I think I think this does -- -- it helps to prove to consumers that the credit scoring system in this country is not broken.
Obama took a lot of heat for the credit meltdown and a lot of wonderful being blamed for misusing credit scores and I think this helps to show consumers -- This system is actually pretty darn consumer friendly and not only was -- a pretty significant chunk of people above 800.
But it was a massive chunk of people above 700.
And seven -- not a fantastic score but five years ago could have gotten a million dollar mortgage if you lied about -- count on -- next.
This guy would limit back then those were the -- eyes and -- Brad.
Let's -- about.
How this could happen all of a sudden is it because the economy is improving is it because people are getting jobs is because people -- suddenly paying their that's what's going on.
You know -- -- commit any one thing is the resulting and a pop.
And the distribution of consumers who -- -- 5% -- -- 750 or 800 for that matter.
That -- the credit score is really a direct reflection of what's on a credit report and if you can pay your bills.
If you can stay out of credit card debt and you can avoid it.
The repo -- of the foreclosure -- of the collection agent then you're gonna have -- incredibly good credit scores even if you're unemployed.
Even if you're under employed screaming -- your salary is five bucks an hour ten bucks an hour -- does not measure our wealth.
So it's really a matter how good you have been protecting that credit report information for any of the side effects not a bad economy -- Does this mean the people -- in this spend more is there any correlation between having high credit score.
-- -- -- -- -- -- I think that's -- it's a very very good point and I think what this does stay here is -- what -- does this basically is.
Opening up the block if you will for lenders to go again full force and start marketing very heavily to this Mac.
Since senate consumers over a 100000100.
And -- over half the people in this country.
Who have a credit report over a 109 have Michael scores about 700.
That is a gold mine.
The credit card issuers mortgage lenders auto -- personal long Lander is to go after those -- and say hey look we realize that your and decent -- from a credit risk perspective.
We're gonna start marketing -- what does that mean it needs -- consumers' are gonna start taking on more and more debt.
That's this kind of the ebb and flow of consumer credit when the marketing picks up so does the debt sort of the default and no wonder pull -- -- -- all sorts -- -- If I saw a vicious cycle you don't wanna know though so are we -- to cream melt down levels war credit are we back to 2007.
Are we there yet.
Now -- it out an end and frankly we never will be there again thankfully I think lenders especially in the mortgage environment learned the last send.
A lot of those really aggressive exotic mortgages the 125%.
LTV -- a liar loans.
Have -- they're -- on -- they're extinct and really there's no sign -- -- ever going to combat.
There is even an indication.
That the requirements.
It's to get an FHA Carter even more difficult let me -- -- I had to have a fight off 580 to get an FHA loan which is basically -- -- -- -- -- the lowest distribution.
In the world from from a -- standpoint so yes the lenders have learned their lesson to some extent but.
During this is wanting money so -- are still looking for that little nugget of gold population of consumers that they can market their products and services to and still make a good return on the back in about having disproportionate defaults.
Well -- it occurs to me that the morning there they market to people the more really gonna see people sign on.
Take on more debt find more so that means a better economy generally right.
No I don't disagree with you at all and if you look at.
If you look at it right now there's a very very aggressive credit card marketing I don't think I'm telling you anything you don't now -- When I am telling you is that rewards programs more aggressive and I've ever seen him.
Balance transfer programme -- more aggressive and I -- ever seen -- 0% APR on transfers and on new purchases for a year and a half.
Half that's extremely impressed that the credit card issuer community wants you back and lot.
Dole these these folks are just not demonize them at all because as long as you pay your bill and -- -- it really cost you nothing.
I Justine credit -- didn't -- anything irresponsible concern I want the opportunity to say yesterday as I -- -- -- the but at the end of the day you have to make the Smart decision take on the debt that you can actually afford to repay.
And debt of course what I always say and I think you and I agree on this is.
You need to be insisted he can opt out.
Never have a credit card.
Data trying to hurt and never pays out you know if you pay everything cash nobody knows New York.
That's an alcoholics did not solution to staying out of debt avoiding it entirely.
Getting in debt as a completely voluntary act no one stands over your head and says yes by that yes by that it's completely voluntary as long as you.
Are playing this -- some.
Properly it's amazing how much you can benefit you simply running right from the system is is cowardice and a -- -- facility to advise people to be frank like.
Well and you are always gonna telling us the rules of the road Jon thanks for comments I appreciate your time.
